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November 14, 2022

What to expect in Washington (November 14)

Senator Catherine Cortez Masto (D-NV) won her re-election race over Republican Adam Laxalt, meaning Democrats will retain control of the Senate in the next Congress regardless of the outcome of the December 6 Georgia Senate runoff (because VP Harris holds the tie-breaking vote in the Senate). The runoff between Senator Raphael Warnock (D-GA) and Herschel Walker will determine whether the Senate stays 50-50 or whether Democrats will hold a 51-49 majority. 

A Wall Street Journal story that focused on some Senate Republicans calling for a delay of leadership elections until after the December 6 Georgia runoff said, “A victory there by Mr. Warnock would hand Democrats more sway in the chamber, because with 51 seats Democrats who chair committees would be able to issue subpoenas, something they are unable to do under the current 50-50 power-sharing agreement with Republicans. An additional seat would also lessen the individual power of centrist Democratic Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.) to stop or alter legislation.” 

Asked about the prospects for a Democratic House victory on CNN November 13, Speaker Nancy Pelosi (D-CA) said, “We’re still alive. But, again, the races are close…” While there was a large amount of reporting over the weekend about Democrats outside chances to prevail, late on Sunday, after more votes had been counted, Cook Political Report House editor Dave Wasserman tweeted that GOP called/probable seats are at 220 and Democratic called/probable seats are at 213, with only two toss-ups. “Dems need a miracle now,” he said. 

Lame-duck session – Congress returns today for a pivotal lame-duck session that will require an extension of government funding, possibly in an omnibus funding bill that could include tax and health items, and action on the National Defense Authorization Act (NDAA), which had been slated for Senate consideration this week but has reportedly been postponed in favor of votes on judicial nominations. Conservatives’ inclination to use fiscal deadlines to drive negotiations has prompted discussion of Democrats using the reconciliation process to address during the lame-duck session the federal debt limit, which otherwise probably doesn’t require attention until the second half of 2023. 

Asked on ABC’s This Week whether “a very large extension” of the debt limit can be achieved during the lame duck session, Speaker Pelosi said, “Well, I think it would be very important for us to do so. I think it’s important to note that what the Republicans have said is they’re going to use the vote on the debt limit as leverage to cut Medicare and Social Security. I think the public should know that. It is a difference of opinion and I think the public should know who’s on their side on all of this.” She further said, “our best shot I think is to do it now. But again, winning the Senate gave us a lot of leverage for how we go forward if we don’t do it in the lame duck. But my hope would be that we could get it done in the lame duck.”

Punctuating the fact that Speaker Pelosi may be anticipating lame-duck action on the debt limit, she said on CNN, “we are so completely focused on our political time, our official time, on making sure that we win and prepare for the lame-duck, whether it’s debt ceiling, or whether it’s other legislation that is necessary for the people as we go forward.”

An editorial in the November 13 Washington Post said Democrats should take the risks of Republicans using the debt limit to extract spending cuts or other concessions off the table, using the all-Democrat budget reconciliation process if necessary. “This would eat up precious floor time in the final weeks before the 117th Congress goes out of business,” the editorial said. “But there could hardly be a more urgent matter than preventing the global financial instability that could result from even partial U.S. debt default.”

The Post said, “enough Republicans are interested in permitting reform and perhaps even the child tax credit that they could pass in some form in future Congresses,” without mentioning other tax items like TCJA cliffs and extenders that may be tied to a CTC expansion sought by Democrats. The editorial argued that the Senate can confirm judicial nominees after January if Democrats were to retain control, which they now have, and that “Democratic leaders should focus on objectives that are not only most necessary but also stand their best — or only — chance of passage during the lame-duck session.”

Leadership elections – Both parties are moving toward leadership elections for the next Congress: 

  • House Republican leadership elections are set for November 15

  • Senate Republicans intend to hold leadership elections on November 16

  • House Democrats will hold leadership elections November 30, after Thanksgiving

  • Senate Democratic leadership elections are said to be planned for the week of December 5

During Sunday interviews, Speaker Pelosi did not address whether she plans to stay in leadership.

Some late-Friday press stories suggested that the absence of a “Red Wave” in the election was prompting some Republicans to question whether leadership elections should be held this week. 

The Washington Post reported that members of the conservative Freedom Caucus, which has already been making demands of prospective leaders, are calling for a delay of leadership elections. The report said the group could make requests that include “putting more members in committee chair positions and having McCarthy publicly back Rep. Jim Banks (Ind.), a staunch Trump ally, as majority whip. But as the expected majority grows slimmer, such demands could irritate more-moderate members, who also hold sway.” 

Politico reported this morning that if Rep. McCarthy doesn’t agree to postpone the elections (during which a simple majority vote of GOP Republicans via secret ballot is needed to nominate their choice for speaker), Freedom Caucus members “plan to nominate Rep. Andy Biggs (R-Ariz.) as an internal pick for speaker to demonstrate that the Californian doesn’t have the 218 GOP votes he needs when the full chamber votes on Jan. 3.” Punchbowl reported that demands from Freedom Caucus members may include rules changes requiring each bill that could come to the floor to get voted on by the entire Republican Conference before it’s taken up by the House to ensure a “majority of the majority” support.

Some GOP senators are also objecting to holding their elections this week and hinting at some dissatisfaction. Senator Marco Rubio (R-FL) tweeted November 11: “The Senate GOP leadership vote next week should be postponed. First we need to make sure that those who want to lead us are genuinely committed to fighting for the priorities & values of the working Americans (of every background) who gave us big wins in states like #Florida.” CNN reported that others are similarly calling for a delay, citing the Georgia runoff election, and that a letter circulating in Washington cites the fact that “a Red Wave failed to materialize.”

A November 11 New York Times report on the absence of a Red Wave said: “Chris Sununu, the moderate Republican governor of New Hampshire, said on Friday that the policies his party put forward had turned voters off. A proposal by Senator Lindsey Graham, Republican of South Carolina, for a national ban on abortion after 15 weeks… was supposed to be a moderate position for the G.O.P. to rally around. Instead, it fueled a sense that Republicans were pushing extreme policies even onto Democratic states. Coupled with the plan by Rick Scott, the head of Senate Republicans’ campaign arm, to ‘sunset’ the current versions of Medicare and Social Security, those policies were unnecessary ‘bits of gasoline on the fire.’” 

Senator Mitt Romney (R-UT) said November 10 that, to the extent of their post-election power, Republicans should steer clear of “pointless investigations, messaging bills, threats and government shutdowns” in favor of addressing inflation “by increasing legal immigration, expanding the number of work visas in sectors that face worker shortages, securing the border, reducing tariffs on our allies, facilitating oil, gas, nuclear and renewable development, and reining in spending.” He also asserted that because two-thirds of federal spending is automatic nondiscretionary spending like Medicare, Social Security and Medicaid, “both parties will need to work together to find solutions to the entitlement crisis.” 

On Friday, November 18 (12 p.m.), is the EY Webcast, “Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments.” Register.


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For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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